The global cashew market has been relatively quiet lately, with limited trading activity. This slowdown is partly due to the seasonal lull as kernel buyers are on vacation, while inshell arrivals in key regions like Vietnam and India create cash flow pressures, prompting processors to make distress sales.

In-Shell Market Overview

As we enter september, inshell availability is expected to decrease. This raises important questions about the coverage processors have for their operations for the rest of the year. Tanzania will be the next significant source of inshells, but these won’t be available for processing until the end of the year.

Kernel Market Performance

On the other hand, the kernel market has shown strong performance so far. Shipments from all major processing regions worldwide have seen a healthy increase, exceeding 25% growth up until July. However, there are key uncertainties about kernel stock availability at destination points and inshell supply among processors, both of which will influence cashew prices until the new crop arrives.

Key Market Trends: What to Watch

Bullish Indicators:

• Global Demand Surge: We are entering a period of traditionally strong demand for cashews worldwide, which could push prices higher.
• Low Inshell Availability: There is limited inshell availability to meet processing requirements before the new crop arrives.
• Tanzania's Market Impact: With high demand from processors, Tanzanian inshells are expected to trade at elevated prices by the year’s end.

Bearish Indicators:

• Inventory Build-Up Risk: Although kernel shipments have increased, there’s uncertainty about whether this reflects actual consumption growth or merely an accumulation of inventory.
• Domestic Market Responses: How will key domestic markets such as China, the Middle East, and India react to current high prices? This is a crucial factor in determining future trends.
• West African Crop Analysis: The real impact on West Africa’s cashew crop will only become clear once export numbers are reconciled. Could the crop be larger than anticipated, and how will this affect global supply?

The cashew market is currently in a transitional phase. The balance between raw product supply and global demand will determine price movements in the coming months. Developments in Tanzania and West Africa, in particular, will have a significant impact on prices for the rest of the year. It is essential to closely monitor both the global demand growth and local market reactions. How major markets like China, the Middle East, and India will respond to the current price levels remains a key question. These factors seem set to shape the price trajectory in the near future.